Seanad debates

Tuesday, 9 July 2024

Nithe i dTosach Suíonna - Commencement Matters

Housing Schemes

1:00 pm

Photo of Robbie GallagherRobbie Gallagher (Fianna Fail)
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I welcome the Minister of State, Deputy Noonan. The help-to-buy scheme, the first home scheme and the vacant property refurbishment grants have all been very successful in supporting young people to go out and purchase their first home.These schemes have made a crucial difference to so many families since they were first introduced. The success of the vacant property grant is becoming clear every day of the week. There has been something like 8,500 applications for that grant thus far, whereby somebody on a vacant property can get a grant of up to €50,000 for refurbishment, or a grant of up to €70,000 for a derelict property. That has been hugely successful, not just from the point of view of young people being able to refurbish a property, but also to help our towns and cities deal with vacancy. Even in rural Ireland, it has been very welcome. I know in my own county of Monaghan, something like 170 have applied for this particular scheme and to a grant aid of approximately €6 million. The figures in Cavan are similar.

These schemes have been hugely beneficial and it is vitally important that everyone acknowledges that fact. However, as the Minister of State knows, time, money and crucially, inflation, do not stand still. There is now clearly a need for the Government to look again at these grants with a view to increasing the thresholds in order for more people to be able to avail of them, bearing the inflation in construction costs in recent years in mind. The help to buy scheme, which I mentioned earlier, came into effect in January 2017 and was designed to help first-time buyers acquire a deposit necessary to build or buy a new home. As I said, it has been hugely successful. In 2020, it was increased by the Minister, Deputy O'Brien to €30,000 for young people to help them make that first step. As I said, something like 48,000 have applied for that scheme. Every week, 500 people use the scheme to help them get their first home. Unfortunately, house prices continue to rise and the price for building and construction materials has gone up approximately 48% since 2019, which is something none of us could have ever foreseen when these schemes were first introduced.

According to industry experts, there is a real sign that the price of materials, crucial for the construction of properties, has no sign of abating. That, coupled with the increase in labour costs, means unfortunately that the value of these grants continues to be eroded. Regarding labour, I know the Government has introduced some very worthwhile schemes, including the apprenticeship and trainee schemes. Unfortunately, while they have been successful, it will take some time for them to eat in. The median price of a new home in rural Ireland at the moment is €400,000, whereas it is €500,000 in Dublin. Inflation in the cost of materials and labour continues to push up housing costs and, ultimately, prices. We all know the need for housing is great, but market demand is constrained by the ability to pay. Therefore, the level of supports for first-time buyers needs to be kept under current review, be it the first-time help to buy initiative or for renovation and refurbishment. In order to keep pace with the increase in costs of materials and labour, there is a need for these schemes to be constantly reviewed. I ask the Government to look at my request and I look forward to hearing the Minister of State's response to that.

Photo of Malcolm NoonanMalcolm Noonan (Carlow-Kilkenny, Green Party)
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Gabhaim buíochas leis an Seanadóir as an gceist seo a ardú. I thank the Senator for raising this question and for keeping it firmly on the agenda during his tenure in the Seanad. They are important schemes. The first home scheme, launched in July 2022, is a shared equity scheme, designed to help bridge the gap for eligible first-time buyers, other eligible home-buyers and self-builders between their deposit, mortgage, and the price of their new home, within established price ceilings. An overall investment of €480 million was committed to the scheme, with an equal contribution from the Department and the participating banks. In April, the first homes scheme published their quarter 1 2024 delivery figures. These show that over 4,000 approvals have been issued since the scheme launched, which is very impressive. The average price of a home bought was €379,469 with the average equity support provided being €66,642, equating to 18% of the price of the home. In June, the fourth scheduled six-monthly review of the price ceilings that apply to qualifying homes was undertaken with agreement to revise price ceilings in 14 local authority areas.The 13 local authority areas at the lowest price ceiling increased their ceilings from €325,000 to €350,000, with the Limerick city and county ceiling increasing from €400,000 to €425,000. The revised price ceilings came into effect on 1 July this year.

The vacant property refurbishment grant was launched in July 2022 under the Croí Cónaithe towns fund to support the refurbishment of vacant and derelict properties and bring them back into use as homes. The grant initially provided up to €30,000 for the refurbishment of vacant properties, with up to a maximum of €50,000 for derelict properties. The maximum grant amounts payable were increased to €50,000 and €70,000, respectively, in May 2023 to take account of the increase in construction inflation to which the Senator referred. A review of the grant, which was committed to on its launch, including of grant levels, has been completed and is with the Minister, Deputy Darragh O'Brien, for consideration. Uptake of the grant has been positive, with more than 8,670 applications received, over 5,500 approved and almost 500 grants paid out as work is completed. In light of the success of the grant, the Government agreed to increase the target for homes to be delivered from 2,000 to 4,000 by 2025.

The help-to-buy scheme is a demand-led tax measure rather than voted expenditure. As such, it is a matter for the Minister for Finance.

Under the vacant property refurbishment grant, the national built heritage service in my Department has added a further provision of €5,000 for conservation advice to be given to the owners of eligible properties. As we can anticipate, these older buildings perform differently from modern buildings and restoring them can be complex. The conservation advice is very useful to the owners of such properties to point them in the right direction and take appropriate measures not to do any harm to a building. That can sometimes happen if the wrong interventions are made.

As the Senator said, all of these measures are feeding into the ambition the Government set out when it was formed. In line with our town centre first policy, they seek to unlock the potential of the amazing buildings in our towns, villages and cities. Bringing those properties back into use will bring vibrancy back to our town centres. As I outlined, the uptake of the schemes has been huge. The Government is keeping an open mind in this regard. The schemes are under constant review in the context of the changing landscape under which they operate.

Photo of Robbie GallagherRobbie Gallagher (Fianna Fail)
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I thank the Minister of State for his comprehensive reply. As he outlined, the schemes have been hugely successful. I compliment all the parties in government on bringing them forward. I thank the Minister of State for introducing the €5,000 grant for the conservation of farmhouses. It is very welcome. As he said, such restoration projects can be quite complex.

I am heartened that the Minister has undertaken a review of some of the schemes. I look forward to some news in that regard. The help-to-buy scheme comes under the auspices of the Minister for Finance. I have made contact with him about it. I am glad the Government is very much cognisant of the need to keep the schemes under constant review. I look forward to some positive developments in the not too distant future.

Photo of Malcolm NoonanMalcolm Noonan (Carlow-Kilkenny, Green Party)
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I thank the Senator for his positive comments. The schemes we are discussing have been transformative. The 4,000 approvals under the first home scheme and the upping of the targets for the vacant property refurbishment grant from 2,000 to 4,000 show the scale of demand for those schemes. We want to see our ambition realised. We have been losing the vernacular buildings dotted all over the country, which form part of the heritage of our towns and villages, at a rote of knots up to now. These grants mean families can see a channel of affordability in restoring such buildings. A constituent told me yesterday that having been unable to afford a farmhouse restoration project before a grant was available, the property is now restored.

We will continue to review the schemes. The Minister is committed to ensuring the ambition set out in Housing for All is met. Added to that, we want to see an architectural conservation officer in place in every local authority. The support and advice they can offer is really important. I thank the Senator for raising this Commencement matter. It is important that we continue to review and evaluate the success and efficacy of these schemes.

Photo of Martin ConwayMartin Conway (Fine Gael)
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I thank the Minister of State for giving his time today. I thank Senator Gallagher for raising this very important Commencement matter.

Cuireadh an Seanad ar fionraí ar 1.45 p.m. agus cuireadh tús leis arís ar 2.03 p.m.

Sitting suspended at 1.45 p.m. and resumed at 2.03 p.m.